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IM 648 SUPPLY CHAIN MANAGEMENT FALL 2008 Instructor: Eddine Dahel, Ph.D.

Office: McGowan 320-A Phone: 647-4602 E-mail:

Office Hours: Mondays and Wednesdays 2:00-3:30 p.m., otherwise by appointment. In addition, the instructor will be available before and after class for brief consultation. The instructor recognizes that all learning does not occur in the classroom and welcomes student consultations; therefore, an open door policy will be maintained at all times. Course Prerequisites: IM 546 Operations Management, and IM 542 Decision Sciences or their equivalents. Class Meetings: Wednesdays 4-6:50 p.m. in MG307 INSTRUCTIONAL MATERIALS The primary materials used for this course are the following: Text: Business Logistics/Supply Chain Management, 5th Edition by Ronald H. Ballou Prentice Hall, 2004, ISBN 0-13-107659-0. Class Notes: including PowerPoint slides, outside readings, and other course materials are available from the course conference. Software: (1) LOGWARE which comes bundled with the Ballou text, so do not buy the book used unless you can be guaranteed that the software CD comes with it (unless you can borrow it); and (2) Microsoft Excel (used occasionally). Other readings: these books may be read as time allows, they further elaborate on ideas that will be discussed throughout the course but need not be read before class. 1. Supply Chain Management by S. Chopra and P. Meindl. 2. The Management of Business Logistics by J.J Coyle, E.J. Bardi and C.J. Langley. 3. Logistical Management by D.J. Bowersox, D.J. Closs, O.K. Helferich. 4. Inventory Management and Production Planning and Scheduling by Edward A. Silver, David F. Pyke, and Rein Peterson. 5. Introduction to Logistics Systems Planning and Control by G. Ghiani, G. Laporte, and R. Musmanno. 6. Supply Chain Management edited by John Mentzer, 7. Fundamentals of Supply Chain Management by John Mentzer. COURSE DESCRIPTION AND OBJECTIVES Course Description: Supply chain management is unique and, to some degree, represents a paradox because it is concerned with both one of the oldest activity of business: logistics, and the most newly discovered business paradigm: Supply Chain Management. As the global economy gets more competitive and information is exchanged widely and instantaneously, effective logistics and supply chain management are being recognized as the last frontier in which organizations can achieve significant improvements.

COURSE DESCRIPTION AND OBJECTIVES Logistics, according to the Council of Logistics Management (CLM), is the process of planning, implementing, and controlling the efficient, cost-effective flow and storage of raw materials, inprocess inventory, finished goods and related information from point of origin to point of consumption for the purpose of conforming to customer requirements. More casually, logistics is about getting the correct things to the correct places at the correct times, while Supply Chain Management (SCM) is the planning and controlling of the integration of the supply, production, storage, distribution, and sales functions in the most efficient and cost-effective manner to meet ones service requirements. Although these definitions sound similar, in much of the literature logistics has a tactical, problemsolving focus while supply chain management is more strategically oriented. This dichotomy will influence the structure of this course. The course is meant to be an introduction to and survey of the various logistical and supply chain issues that todays organizations must address to remain competitive in a business climate increasingly shaped by information, speed, and flexibility. One major chunk of the course will discuss solution tools to logistical problems. These tools comprise a varied assortment of quantitative methods that address problems in distribution, inventory management, purchasing, warehousing, and customer service. This, roughly speaking, will be the logistics part. Another large portion of the course will address the strategic, integrative issues of the supply chain, like information exchange, buyer-supplier relationships, distribution strategies, outsourcing decisions, cycle time reduction, and strategic alliances. This is essentially the SCM part. Objectives: One objective of this course is to apprise students on how SCM is growing more important as more organizations embrace e-business. The overarching objective, though, is that through this introduction to and survey of the field, students learn what todays issues in logistics and SCM are and how they are treated. That is, I expect the students not only to grasp what typical logistics and SCM problem areas are, but also to become familiar and competent with some of the analytical tools that managers use to address these problems. It is this competency with analytical tools that, I believe, provides students in this course value added beyond the knowledge that may be gained simply by reading various nontechnical books on the subject that cover issues broadly but forgo the depth that quantitative analysis provides. COURSE FORMAT The course will be conducted by a combination of seminar-type lectures and discussions, casework, and in-class computer applications. The lecture will cover the assigned topic, but will not necessarily cover the material as presented in the text. Class discussions will focus on those areas and issues where comprehension is enhanced by additional elaboration or illustration. An effort will be made to maintain as informal an atmosphere as possible. Individual participation by students is strongly recommended. You are expected to attend all classes and to be prepared to discuss and/or apply assigned discussion problems and readings. Students will be called upon by name to discuss assigned topics and concepts.

GRADING The grade you receive for the course is intended to certify your demonstrated proficiency in the course material. Proficiency will be estimated by measuring your performance on (1) three tests, (2) three cases, (3) contribution to group work and (4) class attendance and participation as follows: Tests (3 @100 pts. Each) Cases (3 @ 50 pts. each) Class participation and attendance Contribution to Group Work Total Possible 300 points 150 points 40 points 10 points -----------------500 points

Your final course grade depends on the total number of points you will have accumulated at the end of the semester as follows: 485 - 500 points = A+ 465 - 484 points = A 450 - 464 points = AEXAMS Three tests will be given during the semester. Each test will cover approximately one third of the course materials and include problems like those assigned for homework, questions on lecture materials, assigned readings, and additional items covered in class meetings. CLASS ATTENDANCE AND PARTICIPATION Your grade in this category will depend on (1) your class attendance, and assiduity, (2) the quality of the answers you provide to questions posed by the instructor during class, (3) the effort you devote to preparing the discussion problems listed in the class schedule below, and (4) the general contribution you make to the creation of a positive learning environment. There should be enough opportunities for you to participate. To increase opportunities for effective participation, I will occasionally cold call students. Please leave your name card up for the entire duration of each class and make an effort to keep the same seat throughout the semester. READING The class schedule below outlines the planned sequence of topics, and corresponding reading from the text. We will not however cover everything in the listed text chapters. I suggest that you read the text and lecture notes in parallel. With respect to reading the text, emphasize the material that corresponds to the class notes, and de-emphasize the rest. This will reinforce your understanding and allow you to spend less time on the topics in the text that are not covered in the lecture notes. HOMEWORK The planned sequence of topics and corresponding homework problems are listed in the class schedule. Homework problems are not collected or graded but are an excellent way to help you understand the topics and prepare for the tests. You should work the suggested problems shortly after the corresponding lecture and compare your solutions to the answers posted in the course 435 - 449 points = B+ 415 - 434 points = B 400 - 414 points = B385 - 399 points = C+ 365 - 384 points = C 350 - 364 points = C330 - 349 points = D+ 300 - 329 points = D Below 300 points = F

conference. If you experience any difficulty with the homework or are unable to obtain the indicated solution, please see the instructor. CASE ASSIGNMENTS Case studies offer an excellent opportunity for students to consider supply chain management decisions in realistic situations. Three group-based case assignments are required for this course. The cases along with their due dates are listed in the class schedule below. Each group comprises three students. Any deviation from this target number requires approval of the instructor. The composition of the groups remains the same throughout the semester. The objective of the group case assignments is to come out with a first-class cooperative effort. It is the responsibility of the team to assure that each team member has contributed approximately equally to the group work. Each member of the team will be asked at the end of the semester to evaluate his or her own contribution, and those of other team members. A team evaluation form can be downloaded from the course conference during the last week of class. HOW TO ANALYZE A CASE There is no one best approach to analysis of a supply chain management case. However, the following general steps and guidelines can be followed to ensure better case analysis. Preview the case. The purpose of the first step is to give you an overview of the case and the existing situation. You may wish to read rapidly or to skim through the case, taking notes and jotting down important ideas, key problems, and critical factors. You may even wish to write down ideas relating the main problems or issues in the case at this point. Read the Case. Once you have previewed the case read it in detail, taking careful notes on important facts, problems, and issues found within the case. While you are reading the case in detail, you should be looking for major problems, sub-problems, controllable and uncontrollable variables, constraints and limitations, alternatives available to the organizations, and possible quantitative techniques that might be used in solving the problems facing the organization. To formulate the problem, it may be necessary to reread certain parts of the case. After the problem has been formulated, it should be summarized and recorded in writing. Develop the Solution. Provide answers to each of the case questions separately. This usually involves the application of one or more quantitative techniques. Many times the solution should also embody important qualitative and judgmental factors that cannot be quantified. Your solution should be both quantitative and qualitative. Graphs, and other numerical results obtained from your analysis of the case should be included in your managerial report. In addition, you need to review the quantitative analysis output and make judgments and/or interpretations about the case situation. Discussion and results interpretation should constitute a major component of your managerial report. CASE REPORTS Case reports are due at the beginning of the class in which the case is due. Tardy reports will suffer grade decay equivalent to one letter grade per day late. Each case report should be typed and comprise the following: (1) a title page with the case title and full names of the authors, (2) the main body of the report starting on the second page, and (3) the report appendix. The main body of the report is where you provide answers to each of the case questions. Numerical results, tables, exhibits, figures, etc., should be professionally presented in the report appendix. Reports will be evaluated for such factors as apparent understanding of the topic, originality of treatment and discussion, accuracy of results, comprehensiveness of the reports content and depth of the analysis, clarity and mechanics of presentation such as organization, format, punctuation, grammar, and quality of exhibits and charts.

COURSE CONTENT The course is organized into six major parts as follows. 1. Course Introduction and Supply Chain Strategy We start by defining business logistics and supply chain management (SCM). We will discuss the significance of SCM and its importance to the success of a firm. We will cover key SCM activities and processes, and discuss SCM scope, dimensions, and trends. Supply chain decisions will be divided into three categories - strategic, tactical, and operational. We will discuss the concept of implied demand uncertainty, and contrast supply chain efficiency with supply chain responsiveness. We will identify drivers of supply chain performance, and provide a framework within which these drivers may be analyzed. 2. Transportation Decisions in the Supply Chain We will discuss the role of transportation in the supply chain and raise various tradeoffs that need to be considered when designing and operating a transportation network. We will discuss the domestic and international transportation and consider the different modes and their performance characteristics. We will discuss rate types, profiles, and stop-off privileges schemes. We will motivate the link between transportation and inventory costs in the design of transportation networks. We will also consider different problems that are relevant when making transportation decisions. We will study a variety of quantitative tools that are useful in mode/service selection, freight consolidation, and vehicle routing and scheduling decisions. We will Introduce the LOGWARE software. 3. Sourcing Decisions in the Supply Chain This module discusses the role of sourcing in a supply chain. We will identify dimensions of supplier performance and their impact on costs. We will discuss strategic and tactical issues in supplier selection and rating, purchasing leverage, order quantity allocation. We will examine a variety of purchasing types including speculative, forward, hand-to-mouth, volume/quantity discounts, dollar averaging, deal buying. Also discussed are advances in sourcing such as vendor-managed inventory, electronic data interchange, E-sourcing and global purchasing. 4. Supply Chain Network Design We will discuss the role of distribution within a supply chain, identify key factors of distribution networks, and discuss the strengths and weaknesses of various distribution options. Also, we will discuss international issues in global supply chain network design and develop a framework for facility location decisions that allows for a multi-plant, multi- warehouse network to supply a large and diverse customer base. We will study a variety facility location models. Our objective will be to optimally structure the distribution network, taking into account cost and customer service factors. 5. Supply Chain Coordination This module will discuss information system issues within the supply chain. Our goal will be to identify the role of various information systems as well as some current considerations in the industry. We will also illustrate the importance of sharing information throughout the supply chain by means of a computerized simulation of the Beer Distribution Game. We will also discuss the Bullwhip Effect and means by which to minimize its intensity in the supply chain.

6. Closed-Loop Supply Chains and Reverse Logistics Recovery of used products and their remanufacturing into new ones is gaining justifiable popularity among many companies worldwide. In this module we will discuss the impact of product recovery and remanufacturing on the design and operations of supply chains and examine the roles of closed-loop networks and reverse logistics in facilitating product returns and remanufacturing. TENTATIVE CLASS SCHEDULE Note: We will stay as close to this schedule as possible; however, coverage will depend on overall class progress and discussion. Learning Activity Additional Homework



Topic Introduction and Strategy




Introduction: Definitions, Supply Chain Decisions, Supply Chain Drivers, Supply Chain Strategy, and Emerging Trends Tranportation

Chapters 1, 2

12 page 31 13 page 60



Transportation in the Supply Chain: Transportation Modes, Interrmodal Transportation, Containerization, Rate Profiles, Transportation Decisions: Mode/Service Selection

Chapter 6 pp. 164-193

14 & 15 page 217

Chapter 7 pp.219-225 page 255 Chapter 7 pp. 225-231 4 pp. 256-257

Discussion 3 09/17 Lecture

Prepare answer to problem 1 Transportation Decisions: Shortest Route Method, Transportation from Multiple Origins and Destinations, Routing through Transshipment Points, Introduction to LOGWARE Prepare answer to problem 3


page 256


Lecture Discussion

Transportation Decisions: Vehicle Routing and Scheduling, Freight Consolidation Prepare answer to problem 6

Chapter 7 pp. 232-243 pp.252-254 page 259

10, 12 pp. 261, 263


Test 1

Chapters 1, 2, 6, 7



Learning Activity

Topic Sourcing


Additional Homework



Sourcing Decisions in the Supply Chain: Importance of Purchasing, Supplier Selection and Rating, Order Allocation Quantities and Timing Prepare answer to problems 4 & 9 Orion Foods, Inc

Chapter 10 pp. 446-449 pp. 458-462

Discussion Case 1 Due

pp. 465-466 pp. 276-280



Sourcing Decisions in the Supply Chain: Timing of Purchases, Quantity Discounts Prepare answer to problems 6 & 8 . Vendor Managed Inventory, Electronic Data Interchange (EDI), Reverse Auctions,E-Sourcing and Global Purchasing Network Design

Chapter 10 pp. 450-458 pp. 465-466 Instructors Notes

7, 10 pp. 466-467

Discussion 8 10/22 Lecture


Lecture Discussion Case 2 Due

Supply Chain Facilty Location Decisions: Single Facility Location Methods Prepare answer to 1 (a, b, & c), 3 Industrial Distributors, Inc. Chapters 9, 10, Instructors Notes Supply Chain Facilty Location Decisions: Multiple Facility Location Methods, Retail/Service Location Prepare answer to 1d, 9

Chapters 13 pp. 551-562 pp. 597-600 page 468

10 11

11/05 11/12

Test 2 Lecture

Chapter 13 pp. 562-582 pp. 597-601

3 page 598 9, 10 page 601




Learning Activity

Topic Coordination


Additional Homework



Lecture Discussion Case 3 Due

Supply Chain Coordination The Beer Distribution Game and the Bullwhip Effect Superior Medical Equipment Co. No Class Closed-Loop Chains

Instructors Notes

pp. 607-609





Closed-Loop Supply Chains and Reverse Logistics Chapters 13, Instructors Notes

Instructors Notes



Test 3